Travelers keep spending despite record costs, driven by FOMO

Americans continue to book expensive vacations even as prices hit record levels. New data from the travel insurance marketplace Squaremouth shows that insured trips increased by 12.9% year over year. The average cost for these insured trips now exceeds $7,400. This growth persists despite rising expenses across the board.

The NerdWallet Travel Price Index indicates that U.S. travel costs are 9% higher in October than they were last year. Airfare prices have surged by 22.4% over the same period. Lodging costs have also climbed, rising 4.3% year over year. Squaremouth surveyed more than 3,000 customers after purchase to determine why people are still traveling despite these hikes.

The top reason for prioritizing travel is making memories with family and friends. This motivation applies across all age groups. Nearly 8 in 10 travelers, or 78%, reported experiencing fear of missing out on travel. The data suggests that Americans are willing to take on debt to maintain these shared experiences.

The report attributes this FOMO to personal connections rather than social media. Friends and family sharing their own trips cause more anxiety than online articles, television, and movies combined. The influence of this personal FOMO increases with age. Among the Silent Generation and Baby Boomers, friends and family drive 41% of travel FOMO. For Generation X, the figure is 36%, while Millennials report 33% and Generation Z reports 31%.

Despite the lower percentage, Generation Z experiences this feeling more frequently. About 40% of Gen Z travelers feel travel FOMO at least once a month. This rate is nearly double that of Baby Boomers, who report the feeling monthly at 23%. Overall, 28% of all travelers feel this pressure at least monthly, and 7% feel it almost daily.

Motivations for travel also shift with age. Younger travelers are more likely to cite escaping daily stress as a primary driver. This reason accounts for 36% of Gen Z travel decisions. For older generations, the sentiment of not being able to imagine life without travel is more prevalent. This factor drives 31% of the Silent Generation’s motivation and 27% for Boomers, compared to just 15% for Gen Z.

The impact of the pandemic on travel habits has also faded. Six years after the global lockdown, the desire to make up for lost time ranks last among travel motivators for every generation. It was cited in just 5% of responses. Jackie Mondelli, chief marketing officer at Squaremouth, noted that friends and family drive more FOMO than digital media. She said travelers prioritize shared experiences even as costs remain high.